Demystifying Cloud Costs: A Chat with Strake's CEO

Posted on October 4, 2023 by Bailey Crumpton. Tagged: Colorado Companies, Resources for Entrepreneurs, Denver Tech Companies, Boulder, For Clients

Every day, thousands of organizations harness the power of cloud services like Amazon Web Services (AWS) to fuel their operations and growth. Cloud technology offers unparalleled scalability and flexibility, enabling organizations to build and deploy applications with ease, and today, many tech organizations are leaning even deeper into their dependence on cloud management systems.

Yet, beneath the surface of the cloud's promise lies a lurking predicament that haunts even the most seasoned teams. Picture this: you're stuck in what Strake CEO and Co-Founder, Jim Treinen, calls the "cycle of pain." Finance calls the VP of Engineering asking why cloud costs are out of control, who then calls on the engineering team to dive into a sea of numbers to figure out what is causing the issue, spend hours fixing the problem, and then, maybe you can guess it? A month later, it’s déjà vu and cloud costs have spiked again.

Enter Strake, a technology company out of Boulder, CO that recognizes this perpetual struggle all too well. This nearly universal pain point for growing tech companies is the founding issue Treinen and his fellow Co-Founders Adam Younce and Brian Regan wanted to address when they launched the company in 2021.

On a mission is to decipher the AWS cost enigma and eliminate unexplained spikes that drain resources, time, and patience, Strake’s platform was developed by engineers, for engineers. Our interview with Treinen digs into why the technology Strake is developing matters and the impact the team is striving to make as they continue to hone their ground-breaking software.

Mission Nearly Impossible: Demystifying Cloud Billing

In order to understand Strake’s initiatives, it is important to first understand how AWS usage costs can spike to unmanageable levels seemingly overnight, if you can… While he won't go so far as to say Amazon is actively hiding how they bill for cloud storage usage, “they're not being super transparent either because they're in the business of getting people to spend more money in the cloud,” Treinen explains.

BWB Blog Post 231- Meet Strake 3-minHinting at the convoluted nature of AWS billing, he explains that when AWS charges are concealed behind cryptic labels like "EC2 Other" and "Data Transfer," many companies can silently accumulate costs without even realizing it, resulting in jaw-dropping expenses sometimes to the tune of hundreds of thousands of dollars.

Treinen points out that while many compare AWS usage to the gas meter on the side of your house, where the more you use, the more you get charged, the reality is that “it’s not that straightforward regarding how those variable costs add up.”

With such a lofty task at hand, we asked what made Treinen and his team feel compelled to tackle such a nameless, faceless beast? He replies with, “We lived the nightmare. I was the VP of Engineering at Carbon Black, an endpoint security company. During my time there, Brian, Adam, and I lived this problem every day.”

Sharing that their CFO voiced concerns that cloud costs were going to negatively affect the ability to take the company public, Treinen knew they needed to urgently fix the issues driving those costs as to not impede their progress towards going IPO. Working closely with Younce, Regan, and the finance team, Treinen adds that they “spent the better part of a year very iteratively reducing Carbon Black’s cloud spend and increasing efficiency.” Ultimately, the company did go public, and eventually, Carbon Black was acquired by VMware. From that point as the company continued to grow, the cost problem reemerged.

From Ideas To Application

Asking Treinen to speak more on the process of taking an idea and making it into a living, breathing startup and software application, he describes how the team worked hand-in-hand with Unusual Ventures out of Menlo Park to go out, collaborate with a community of design partners, and build their platform based on that partner input.

On what it takes for new startups to raise funding, Treinen says, “you have to show that you're solving real pain for a targeted set of users. Specifically for the early-stage companies, it's all about identifying a very unique and isolated pain point, and then relieving that pain. If you're able to show traction at an early part of the idea where traction is defined by usage and revenue, there's money out there.”

He chuckles, adding, “so, this isn't Jim, Adam and Brian's big vision. We may have started with that, but since, we've gone out and had hundreds and hundreds of calls with people saying, ‘this is what we're doing, what do you like, what do you not like, what's missing?’ Repeat, repeat, repeat.” This iterative process helped the team understand not only how the platform could enable engineers to make data-driven decisions, but also, “that the biggest hidden secret about AWS is that they really get you on variable spend,” Treinen says.

Variable spend, as it may be, is at the crux of addressing some of the biggest pain points faced by modern engineers. In this, Strake's platform has been designed from the start to go beyond bill reformatting and chasing ghosts to focus heavily on features that allow engineers to zero in the actual culprits behind costs. He also shares that when the company was starting to hire back in 2021, they experienced the whirlwind of the “war for talent,” and in partnering with BWBacon, started to grow a great team. Treinen says, “the good news is that engineers can identify with these problems, and that helped us significantly. Colorado continues to have a really solid talent pool, so we have been able to build a team we can invest in as we continue to grow.”

What Makes Strake More Effective Than Competitor Products?

Now, nearly two years into the journey, the Strake team has put in the hard work to find their footing and distinguish their product from the rest. While competitors of Strake have found other ways to address issues of AWS usage, Treinen emphasizes that

Ours platform is aimed at enabling the engineers, who are ultimately the people that have to solve the problem anyway. We’re focused on understanding what is driving the bill up and uncovering what factors are influencing those variable charges.”

BWB Blog Post 231- Meet Strake-minHe continues, “rather than exclusively giving visibility to the finance team, which leaves the engineering team with a significant amount of work to understand what’s actually going on, we're building tools to make that process much, much faster.”

He's quick to add that while Strake puts power in the hands of engineers, cloud management is not a one-time fix—it's an ongoing journey. He says, “one of the questions we always get asked is ‘once cost is fixed, isn't it fixed?’ And the answer is, it's never fixed. The cloud is very elastic, which makes it very powerful, but it also means that somebody on my team could go out, acting purely in good faith trying to solve a problem, and end up incurring some pretty serious costs."

Frequent incidents of misusage are exactly why companies using AWS need a partner like Strake. Their goal is to help companies get away from what’s known as ‘monitoring by bill,’ a retroactive response to over-bloated bills versus a proactive one where those costs can be prevented before they are even charged.

It’s Plug, Play & Off To The Races

All this talk of reducing AWS costs sounds great, but how can companies get started? Treinen encourages anyone with further interest to check their recently published eBook, 5 Ways To Cut AWS Costs You Didn’t Know About on uncovering the top five offenders, available for free on their website. Education is a key component of what Strake hopes to offer its customers, heightening their ability to identify the most egregious offenders of their cloud usage before costs run wild.

We also asked what the implementation process is like for companies needing to get a grip on their cloud storage spending yesterday, and Treinen replies that clients using their product see results right out of the gate; there’s no weeks-long onboarding process to speak of. Getting more technical, Treinen clarifies, “we don't do any automated remediation, which is by design, because to start telling engineers that you're going to change their cloud environment can cause issues. However, installing our software is as simple as running a single piece of CloudFormation. All we need is an Account ID and a s3 bucket location, and we're off to the races.”

Between educational resources and the power of the Strake platform, many customers have already found success in changing the way that their applications or systems are architected to illicit a decrease in costs. In one example, a customer engaged Strake for a proof of concept because their engineering team was having a hard time understanding their ever-increasing EC2 costs. By automatically assigning costs to the resources causing them, Strake was able to show engineers the real cost of their EC2 resources, reducing the company’s costs by 98% or over $200,000 for the year!

Wrapping It Up With Jim Treinen + Future Possibilities For Strake

BWB Blog Post 231- Meet Strake 2-minClearly, Treinen and the Strake team have only scratched the surface of what is possible when it comes to helping tech teams manage their usage of AWS instead of allowing AWS to manage them. Ultimately, Strake's technology saves engineers time so that they are able to truly focus on what has changed and how it impacts their spending from a high-level perspective.

Treinen knows that this information is crucial and exactly the kind of data he as a VP of Engineering would need to make better informed decisions. “The whole system is built such that you can operate from a very high level, drilling down through various levels of aggregation all the way into the individual resource, whether it's a compute node or a storage bucket, and see detailed information with within a few clicks. It's built to be very, very efficient,” he says.

He adds on, “our team has been building data architectures for decades at this stage, so we are very clued in on how do we take high-level aggregate information and quickly understand, how are we getting metered and charged, and how do we need to scale?”

Getting at the heart of their ultimate ‘why,’ Treinen concludes with an excellent point,

at the end of the day, this conversation comes down to the fact that if you're wasting money on the cloud, it’s less people that you can hire. We want the cloud to run as efficiently as possible to make sure that the teams can continue to have the people that they need to be successful. In removing the toil of understanding what's driving cost and making that data very accessible, we are empowering engineers to go about their real job, which is building and delivering software.”

As far as what’s to come for Strake users, engineers can look forward to new features that will allow for an even better understanding of the operational posture of the cloud. Our partnership with Strake led to the expansion of their team with talented engineers from across Colorado over the last two years, and we are proud to partner with organizations like Strake that are aiming to make a positive impact. Looking ahead, we believe Strake’s innovative software will play critical role in helping tech companies navigate the complex terrain of AWS cost management.

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